How COVID-19 Affected the Tobacco Industry

Brief Background of the Association between COVID-19 and the Tobacco Industry.

The COVID-19 pandemic has had specific impacts on the tobacco industry due to the nature of the disease. COVID is a viral infection of the lungs that has proven possible high levels of severity, and in extreme cases, fatality. Medical professionals have identified a host of tobacco-related conditions as associated risk factors for the severe forms of COVID-19. Some of these conditions include respiratory and cardiovascular diseases.

Furthermore, the World Health Organization has found from COVID patient records that “smoking is associated with increased severity of disease and death in hospitalized COVID-19 patients.” Tobacco products, their use, and associated health risks have therefore been receiving negative attention from the general public.

In addition to the disease itself, the resulting changes that have occurred in the global society, such as lockdowns and social distancing imposed in the majority of countries worldwide, and these changes have led to adverse economic outcomes for many industries. But was the tobacco industry exempt?

Economic Impacts of COVID-19 on the Tobacco Industry.

Like most businesses in every single industry, the pandemic has been a revolutionizing time for the tobacco industry. The global shutdown of all but essential industries held both positive and negative economic connotations, but most of the impact on the tobacco industry created just a few setbacks in the distribution chains of tobacco products. This led to lobbying in Brazil and Russia for the reopening of tobacco factories.

In South Africa, a ban on the distribution of tobacco and alcohol between April and August 2020 was implemented and this adversely impacted business sales and resulted in a court case between BAT (British American Tobacco) and the South African government.

On the flip side of the coin, there was an upturn of calls to increase the tax on the tobacco industry to pay for the health costs of the pandemic. This also constituted a potential threat to tobacco profits. Philip Morris International (PMI), one of the world’s leading international tobacco companies, in its 2020 Q1 earnings report, expressed concerns that “messaging about the potential negative impacts of the use of our products on COVID-19 risks may lead to increasingly restrictive regulatory measures on the sale and use of our products”.

Surprisingly, however, despite these concerns, PMI’s end-of-year results testified a significantly “robust 2020 performance” of sales volume, and even predicted that the minor negative impacts of COVID on the tobacco industry’s sales volumes would reverse over 2021 to 2022.

In 2021, reports have shown that beyond disruptions to supply chains, the COVID-19 pandemic has not done much damage to the tobacco industry. Analysts also believe that the short-term impact of COVID-19 on the tobacco industry will be relatively limited. In reality, the tobacco industry might even emerge from the COVID-19 pandemic in better shape than it went into it.

How COVID-19 Affected Tobacco Users.

In the light of circulating proof that tobacco use has become more dangerous and may increase one’s risk of getting infected with COVID, many efforts have been made, such as bans, tobacco cessation, public awareness, counseling, and more, in order to curtail the widespread use of tobacco products globally.

As a result, approximately 30% of the tobacco users worldwide had their access to tobacco products affected, the commonest reasons being unavailability and the increased prices of tobacco products. Many of these affected tobacco users took this as an opportunity to quit. Of the tobacco users who quit tobacco during the lockdown, an estimated 51% quit because of the lockdown and concerns over contacting and chances of recovering from COVID-19. Abstinence among those who were aware of the association between the coronavirus and tobacco was twice that among those who were not aware.

Nonetheless, some countries still reported increased tobacco use as a good number of tobacco users in these countries acquired heightened reliance on these products as a result of factors such as stress, depression, boredom, insomnia, irritability, weight gain, etcetera.

The Future of the Tobacco Industry.

The tobacco industry may not have experienced severe impacts yet in the pandemic. In the future, however, COVID-19 will likely have a negative impact on the tobacco industry as health organizations like WHO, other non-governmental organizations (NGO), and even government authorities will be putting more and more pressure on the reduction of the production and consumption of the tobacco-related products globally.

However, it cannot be ruled out that the widespread acceptance and economic elasticity of the tobacco industry will help in other ways to keep the industry thriving regardless of the pressure that will be put on it.